Posted by ramana on Wednesday, June 18, 2008 at 3:36pm.
(1.00+x)^20 = 2 where x is the percent. If we call 1.00 + x = Y, then
(Y)^20 = 2
20*log(Y) = log 2
20*log(Y) = 0.30103
log Y = 0.30103/2 =
Solve for y and that will tell you what 1+interest rate must be. Subtracting 1.00 will give you the interest rate. I get something like 3.5%
In 20 years you must make one times the original amount in interest.
20 x = 1
x = .05 or 5%
It said simple, not compound.
oops. You're right. I did compound.
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